Virtual Health Mythbusting: Lack of State or National Reimbursement Policies

Whenever healthcare institutions are considering implementing a telemedicine program, it’s a given that they’ll ask: “How will our providers be paid?”

It’s a valid question. They have committed time and funds to researching their telemedicine program, and their management and the “bean counters” want to be assured that there will be a return on any long-term virtual care investment.

What is the answer from government bodies and insurance carriers regarding reimbursement?

“We’re working on it.”

So it’s clear why this perception exists that there is a lack of policies. And this is why Advisory Board has deemed reimbursement perhaps the biggest barrier to virtual health adoption by providers. The lack of cohesion among state and federal policies is the backbone of this issue.

However, there is legitimate progress being made on the policy front. The Center for Medicare and Medicaid Services (CMS) had until recently reimbursed only for live audiovisual virtual health visits in rural areas. And as we indicated in our latest report, Making Telehealth Work For You: The Ultimate Guide, Medicare volumes continue to grow. Virtual health is now a basic benefit of Medicare Advantage, rather than an optional add-on. Further, earlier this year, CMS added remote monitoring services to the payment mix.

A majority of states now have parity laws. We’ve seen an increase in commercial parity legislation, requiring health plans to cover virtual services the same way they cover in-person services. As of January 2018, 36 states and the District of Columbia had parity laws in place — that’s an increase of four states over the previous year. We fully expect to see this trend continue.

Here’s another perspective: Virtual care is considered a great cost-avoidance strategy. Why? Because it reduces unnecessary patient transfers, optimizes clinical and operational efficiencies, reduces trips to the ER, and decreases length of stay. When all of these “perks” are factored into the telemedicine equation, virtual care really starts to prove its worth in both a healthcare facility’s workflow and overall business strategy.

Unfortunately, many government-related issues tend to be addressed at a snail’s pace, and telemedicine is no different. However, we are trending in the right direction, which gives me hope that reimbursement challenges will soon be a thing of the past.

Shameless plug time — if you want to learn more about how to get positive financial results for your telehealth program, you need to do two things:

Download our latest report, Making Telehealth Work for You: The Ultimate Guide, where we dive deeper into the strategy and tactics of developing a virtual health program and discuss how to overcome the common barriers many telehealth champions face while driving their initiatives forward.